Last Updated on June 23, 2021 by Maggie Sutton
Just because you’re mentally ready to buy a house doesn’t mean that you’re financially ready. When you’re ready to buy, you don’t want to wait while you save for a down payment. While historically people saved 20% for their down payment, you can still get a great home and good mortgage with less, thanks to first time home buyer programs for educators. Between grants, national funding, and different types of loans, there is a home buying program out there for everyone.
Down Payment Assistance for Educators
First Time Home Buyer Classes for Educators
For first time home buyer programs for educators, there are several options at the national and local level including grants, tax credits, and even discounts from real estate agents and lenders. Sometimes it can be hard to even know where to begin!
But, a good place to start is with a first time home buyer class. These classes are an opportunity to go over things like knowing how your personal finances work, the steps involved in buying and closing on a house, and explaining how things work, like inspections and home insurance. One of the best resources from these classes is they generally discuss down payment programs available to you locally.
Some types of loans, and sometimes even lenders, strongly encourage you to attend these classes. Generally, you are not required to take these classes in order to buy a home.
You can find classes at the city, county, and state level, depending on where you’re looking to buy. A good place to look for these classes is on your city, county, or state’s department of housing web pages. If you’re moving to a new area, consider asking your future employer if they know of any resources. They might even know of some rarely used down payment resource programs.
Department of Housing and Urban Development
The Federal Government also offers first time home buyer programs for educators at the state level. The United States Department of Housing and Urban Development, or HUD, distributes funding to states to use through each state’s various programs. Again, you’ll be able to find these resources on your state’s website for housing assistance programs.
HUD also has another program that is specific for teachers, principals, and other educators. The Good Neighbor Next Door Program is designed to revitalize neighborhoods in every state. The homes available in the Good Neighbor Next Door program can be purchased at 50% of their list price! The only catch is that the amount of these program-approved homes is small, and only in certain areas.
Here’s how the program works: when you buy a home through the Good Neighbor Next Door program, you put an offer on one of their program-approved homes for the full list price. Then, your mortgage lender breaks your mortgage into two equal parts. You only need to pay back one of these loans, or 50% of the purchase price. You will not need to pay payments or interest on the other loan, so long as you live in the home as your primary residence, don’t sell it for at least 36 months, and continue to be employed as an educator.
To qualify for this home program, you need to be eligibly employed as an educator. The house you put an offer on must also be one of the houses that HUD has identified as eligible. You can find the list of houses per state on the Good Neighbor Next Door website. Keep in mind that homes are always being added to the list if you don’t find one in your desired location or that fits your needs.
Down Payment Resource
Another place to find first time home buyer programs for educators is through Down Payment Resource.
This is an online, comprehensive database of down payment assistance programs. You can enter your information, including that you’re employed as an educator, to see the programs available to you.
Down Payment Resource has approximately 2,300 programs in their database to automatically match you with.
Low and Zero-Down Loans
Some of the first time home buyer programs you’ll qualify for above can be used with certain types of loans that also offer no or lower down payments.
FHA loans, for example, require as low as 3.5% for a down payment with good credit scores. Even if you have a lower credit score, FHA loans for educators only require at most 10% for a down payment.
So, at 3.5%, if you’re looking at a $200,000 home, your down payment could be as low as $7,000. Sometimes, you can even finance some of your down payment into your loan, meaning you’ll need less cash at closing.
USDA home loans are another excellent option for first time home buyer educators, because they don’t even require a down payment for qualified applicants.
These home loans are designed for educators already living in, or moving to, rural areas. While you might think of rural as a small town, the USDA recognizes towns up to 35,000 people as rural. USDA loans have the most requirements to meet for a government-backed loan, but if you qualify, these loans are such a great option for homeownership.
As we mentioned, there is no down payment requirement with USDA home loans. The loan amount you request can be 100% of the home purchase price. There also is technically no minimum credit requirement, though a 640 credit score or better tend to have better success.
You can also use a USDA loan to build a new home; it does not need to be used on an existing home.
Homes for Heroes
If you qualify for down payment assistance through your local government, and are able to get a FHA or USDA loan, there are even more savings out there for an educator hero like you! Homes for Heroes is the largest, nationwide program of its kind. When you sign up, we’ll connect you with a Homes for Heroes real estate affiliate and mortgage specialist.
These affiliates are in your local area, so they know what the housing market is like where you’re trying to buy. There is no obligation to use our service once you sign up, and there are never fees or extra paperwork when you use Homes for Heroes. We simply want to give back to our heroes across the country.
Homes for Heroes has helped over 43,000 educators and other heroes save more than $75 million on their home transactions. We do this by giving you back Hero Rewards after your closing.
When you use one of our affiliate real estate agents to buy your home, you’ll get $700 back for every $100,000 in purchase price. So, if you buy a home for $200,000, you’d get $1,400 back. This money can be used for anything, like new furniture for your new home, make repairs, or put in savings. It’s yours to do whatever you’d like.
Plus, if you work with our mortgage, title and inspection specialists, you can save $500 on lender fees, $150 on title services, and $50 on a home inspection. We also have deals with companies all over the United States for home and career related products and services, like moving companies, carpet cleaners, storage containers, and home security. That adds up to thousands of dollars in savings!
Homes for Heroes mortgage and lending specialists can work with any of the first time home buyer programs for educators you end up with. The best part is that regardless of the assistance you receive, you’re always qualified to receive Hero Rewards. It’s the least we can do to say thank you for educating in our communities.
Sign up now to get more information from a Homes for Heroes agent. There is no obligation, cost, or extra paperwork for you.